Sterling's farewell symphony: the end of the Sterling Area revisited

Alan de Bromhead, David Jordan, Frank Kennedy, Jack Seddon

Research output: Contribution to journalArticlepeer-review


When and why did Sterling Area countries stop holding sterling as the majority of their FX reserves? This paper takes a comparative approach to examine the relative importance of various determinants of adherence to sterling in its declining years as an international currency. Using an original cross-national panel dataset covering the period 1965 to 1979, we conduct survival analysis which systematically evaluates a comprehensive set of economic and political factors, at the country level as well as in international relations, about when and why countries chose to diversify their reserves away from sterling. Our results highlight the significance of international transactional factors in influencing adherence to sterling, while the effects of British geopolitical retrenchment, Commonwealth cultural ties, and distributional issues were more ambiguous and sensitive to local conditions. We also find that domestic political and historical factors, such as democracy and imperial legacy, played a role in sterling’s international unravelling. Finally, we use our results to examine the experience of individual sterling countries and their decisions to diversify.
Original languageEnglish
JournalEconomic History Review
Early online date15 Jul 2022
Publication statusEarly online date - 15 Jul 2022


Dive into the research topics of 'Sterling's farewell symphony: the end of the Sterling Area revisited'. Together they form a unique fingerprint.

Cite this